Clash over EssilorLuxottica’s next CEO heats up
The fight between the two sides of newly merged EssilorLuxottica escalated sharply on Wednesday with the French company warning its Italian partner against a “take over with no premium to shareholders of Essilor.”
Essilor, the biggest manufacturer of lenses in the world, agreed to merge with Luxottica, the world’s leading consumer eyewear group, at the beginning of 2017. But the merger has been mired by suggestions of a governance clash between the founder-run Italian family business and the French publicly run company.
That clash has intensified since November when the 83-year-old chairman of the combined group and its largest shareholder, Leonardo Del Vecchio, told Italian media that he would put his confidant Francesco Milleri “forward as the CEO of EssilorLuxottica.”
That move raised hackles at Essilor with the Financial Times reporting that the French company sees Mr Milleri as too inexperienced to lead the combined group of over 150,000 employees and more than €16bn in revenues.
People close to Essilor have said that a scheduled search for a “professional CEO” has been stalled due to the conflict and suggested Hubert Sagnières, Essilor’s 63-year-old chairman and vice-chairman of the group, could also take the reins temporarily.
On Tuesday evening, in an apparent attempt to lower tensions, a spokesperson from Delfin, the holding company of Mr Del Vecchio, said that the Italian businessman’s comments “shouldn’t be interpreted as his desire to appoint” Mr Milleri as CEO.
Rather Mr Del Vecchio was “expressing his desire to delegate to Mr Milleri some operational functions of his role as executive chairman of EssilorLuxottica to be exercised jointly with Mr Sagnières”, and that “it is understood that this proposal would not alter the balance of powers between Mr Del Vecchio and Mr Sagnières”.
However, on Wednesday evening, a spokesperson for Essilor said that the “delegation of such power” by Mr Del Vechhio alone is not addressed in the “business combination agreement” between the two companies, and would need the agreement of Mr Sagnières.
“Only the [EssilorLuxottica] board will decide for the key executives including the CEO. A unilateral nomination by the Executive Chairman is a sign of take over with no premium to shareholders of Essilor by Delfin,” added the spokesperson.
EssilorLuxotica will hold a board meeting next Monday where the governance issues will be discussed, said people familiar with the matter.
Delfin, responding to Essilor, said it was “ surprised by Essilor’s reaction” and reiterated its statement of Tuesday to fully comply with the provisions of the combination agreement.